Refinery Subsidy Failed Under You, Presidency Tells Atiku

The Presidency has faulted African Democratic Congress (ADC) presidential candidate Atiku Abubakar’s proposal for production subsidies for local refineries, arguing that Nigeria had already tried the policy during his tenure and that it failed to deliver the desired results.

Senior special assistant to President Bola Tinubu on digital and new media, O’tega Ogra, made the assertion in a post on his X handle yesterday, responding to Atiku.

Ogra said Nigeria’s experience with production subsidies for local refineries under the administration in which Atiku served as vice president produced what he described as “shambolic results.”

He cited data showing that by 2002, the Nigerian National Petroleum Corporation’s domestic crude allocation had risen to 445,000 barrels per day, supplied on preferential terms to local refineries.

According to Ogra, the International Monetary Fund estimated the revenue forgone from the arrangement at 3.2 per cent of GDP in 2002 and 2.9 per cent in 2003.

He questioned what Nigerians received in return for the subsidy, pointing to declining refinery utilisation during the period.

“Refinery utilisation collapsed,” Ogra said, citing NNPC figures which, according to him, showed Warri refinery utilisation at 14.27 per cent in 2003 and 9.10 per cent in 2004, while Kaduna recorded 15.96 per cent and 26 per cent respectively.

He added that Port Harcourt refinery utilisation fell from 60.73 per cent in 2001 to 31.04 per cent by 2004.

Ogra also argued that the subsidy failed to prevent petrol price increases, alleging that petrol prices more than tripled by 2004 and nearly quadrupled by the time Atiku left office.

He further recalled that on October 9, 2003, the administration cancelled the discount through Presidential Directive PRES/158, under which then-President Olusegun Obasanjo directed NNPC to pay the full international price for crude supplied to the refineries.

“Your production subsidy was tried, failed and scrapped, with you as vice president,” Ogra told Atiku.

The presidential aide consequently challenged the former vice president to provide evidence that the policy had worked when it was previously implemented.

“Where is the evidence that it worked the first time?” he asked.

Ogra also alleged that the previous production subsidy programme created billionaires, questioning whether Atiku’s proposal was aimed at producing similar beneficiaries.

He concluded by telling Atiku that “it’s still the same theory you practised then, and we haven’t changed country yet,” while insisting that the country already had the results of the earlier experiment to assess the proposal.